Drumbeat: January 21, 2010

The perennial popularity of forecasts projecting crude prices rising indefinitely reflects the intuitive appeal of the “Peak Oil” theory, which predicts that global oil production will reach a maximum rate and then inexorably decline.

Everyone can grasp the seductively simple hypothesis, which encapsulates deep-rooted insecurities over energy supply. Surely everyone must understand that oil is a geologically scarce resource that must one day run out.

To many who see the writing on the wall, it appears that peak production must be fast approaching, if it has not already occurred.

Nor does it take much economic training to surmise that the price of a commodity should normally increase if its supply falls and demand rises.

So why do some articulate, highly experienced petroleum economists, among them The National newspaper business columnist Robin Mills, take issue with the Peak Oil theory?

NEW YORK (CNNMoney.com) -- The airline industry suffered its largest drop ever in passenger revenue last year as a weak economy grounded many would-be travelers, an industry group said Wednesday.

The Air Transport Association of America said total passenger revenue for the major U.S. carriers fell 18% in 2009 versus the year before. It was the largest drop on record, exceeding the 14% decline in 2001.

The government rejected a proposal by ExxonMobil, the world's largest company by market value, to invest $3.5 billion this year in the Sakhalin offshore fields, putting at risk the oil producer's plans again, Sakhalin Governor Alexander Khoroshavin said Thursday.

ExxonMobil, XTO Energy and other shale-gas producers probably will not face US rules that would add costs of $100,000 per well, given comments at a Congressional hearing yesterday and the loss of a Senate seat by majority Democrats, FBR Capital Markets analysts said.

WASHINGTON (Reuters) - The U.S. government will investigate charges that Chinese companies are selling oil well drill pipe in the United States at unfairly low prices, the Commerce Department said on Thursday.

It is the first U.S. trade probe of the year against China after about a dozen in 2009. The proliferation of cases in recent years has strained U.S.-China trade ties.

1. Lexington will see an increase in refugees from three primary areas and causes:

Mexico – peak oil: The Mexican government is being challenged like never before, both with drug-fueled lawlessness and an absolute free-fall in oil revenues, as their fields have peaked. Lexington has a large and established Mexican community. Expect more friends, relatives and fellow citizens to join them here.

The military is seeking contractors to install more solar power systems at most of its major installations in the state in what ultimately would be a leap in photovoltaic power generation capability in Hawai'i, officials said.

Ted Peck, the state's energy administrator, predicts the military photovoltaic energy project output may reach about 60 megawatts — four times the state's solar production last year.

With many companies investing heavily in algae-based biofuels, researchers from the University of Virginia's Department of Civil and Environmental Engineering have found there are significant environmental hurdles to overcome before fuel production ramps up. They propose using wastewater as a solution to some of these challenges.

These findings come after ExxonMobil invested $600 million last summer and the U.S. Department of Energy announced last week that it is awarding $78 million in stimulus money for research and development of the biofuel.

Under our current economic model, food production, packaging and distribution contribute to more than 20 per cent of our energy use. With most of the cost of food taken up by packaging and distribution it is easy to see how rising food prices, an inevitable consequence of peak oil, could be alleviated by localising and intensifying food production. This is the "Transition Town" notion of decoupling food from oil.

“The fact that we are building this road, the fact that we are destroying this land—destroying our ability to feed ourselves—is a crime against humanity as great as any of the other ones that we have witnessed in the previous 100 years or so,” Steves told the crowd of about a hundred. “By not coming to grips with climate change, by not coming to grips with the loss of our farmlands and the loss of habitat, our politicians today are every bit as guilty as every one of the despots that has gone before.”

ABU DHABI // If people living in the UAE do not make changes to their carbon-intensive lifestyles, their children may face a dark future, one of the world’s leading figures on climate change warned yesterday.

“A child of five or 10 now, if we go on business as usual, is likely to live to see the kind of very, very difficult circumstances we are talking about,” said Lord Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science.

Scepticism about Ghawar’s ability to maintain its astounding output has risen in recent years, driven by doubts about the technical management of the field, and especially the use of increasing amounts of water to force oil out of the ground. Matthew Simmons, a businessman and investor who has become a leading peakist, claims that it may not be long before “the remarkably high well flow rates at Ghawar’s northern end will fade, as reservoir pressures finally plummet. The death of this great king leaves no field of vaguely comparable stature in the line of succession. Twilight at Ghawar is fast approaching.”

Daniel Yergin, the author and president of the industry consultancy Cambridge Energy Research Associates – whom Maass calls the “closest thing the oil world has to a guru” – dismisses the warnings of Simmons and his peers. “This is not the first time that the world has ‘run out of oil,’ ” Yergin tells Maass. “It’s more like the fifth. Cycles of shortage and surplus characterise the entire history of the oil industry.”

In some of the book’s best reporting, Maass goes beyond Yergin, and lands firmly in the worriers’ camp. This happens when we meet Sadad al Husseini, Aramco’s former top executive for exploration and production.

BP would like the opportunity to expand its presence in Russia to explore for oil and gas in the country's Arctic region, Chief Executive Tony Hayward said Thursday.

"We have worked for decades in areas such as the North Slope of Alaska, the Canadian Arctic and Northern Norway," Hayward said in a speech to the Moscow Academy of National Economy, which was posted on BP's Web site. "BP has also been very active in the offshore Arctic regions, which represent an important new frontier for the industry."

RIYADH, Saudi Arabia – The Saudi army has lost 113 troops since the kingdom launched a sweeping offensive against neighboring Yemen's Shiite rebels in early November, a military commander said in comments published Thursday.

The kingdom's well-funded but largely untested military joined the fray after Shiite rebels from Yemen crossed the border into Saudi Arabia on Nov. 5, killing two Saudi border guards.

SLAMABAD – The Pakistani army said Thursday during a visit by U.S. Defense Secretary Robert Gates that it can't launch any new offensives against militants for six months to a year to give it time to stabilize existing gains.

The announcement probably comes as a disappointment to the U.S., which has pushed Pakistan to expand its military operations to target militants staging cross-border attacks against coalition troops in Afghanistan. Washington believes such action is critical to success in Afghanistan as it prepares to send an additional 30,000 troops to the country this year.

America's shale gas resources can play a critical role in securing America's energy future, members of a key Energy and Commerce subcommittee heard yesterday -- but only if the technology needed to produce those resources remains intact and under the regulatory oversight of the states.

U.S. lawmakers on Wednesday opened a hearing into Exxon Mobil Corp.'s (XOM) planned purchase of gas producer XTO Energy Inc. (XTO) with upbeat comments about natural gas and limited criticism of the controversial drilling technique that is at the heart of the merger.

Most Germans are in favor of the expansion of renewable energy -- provided the plants aren't built in their neighborhood. All over the country, local groups are coming together to stop solar, wind and biogas projects. But where can power plants be built if no one wants them in their backyard?

Spanish Prime Minister Jose Luis Rodriguez Zapatero has provided further details of his vision for the EU's 2020 economic strategy, including measures to promote electric car production in Europe.

Speaking before the European Parliament on Wednesday (20 January), the Socialist leader, whose country currently holds the EU's six-month rotating presidency, said the 27-member union would embark on a major new project to promote electric-car production.

Federal highway officials says congestion in carpool lanes is increasing throughout California, Richards writes. Ending access for single-occupancy vehicles would speed the ride for more people--trading off incremental gains in fuel efficiency and air quality for moving more bodies.

Still, the core factor was simple enough; the fraternal orders went away because most Americans didn’t need them any more, and were no longer willing to pay the costs of maintaining them. Once labor unions won the right of collective bargaining, employers rather than lodges started to cover sick pay; social security and other government welfare programs provided a social safety net much sturdier than the one the lodges were able to weave from their own resources; more broadly, the immense general prosperity of American society in the wake of the Second World War made starving to death in the street a good deal less pressing a threat than it had been not too long before.

The Sierra Club's new leader will come to the job with a record of "environmental agitation" against big industrial polluters. The group announced on Wednesday that Michael Brune, 38, currently head of Rainforest Action Network (RAN), will replace Carl Pope as executive director as of March 15. Brunehoned RAN's strategy of negotiating politely with corporate heavyweights such as Bank of America, Citigroup, and General Motors—and then, if they don't clean up their acts, campaigning mercilessly against them. The two-pronged approach earned results that belie RAN's modest size—it helped convince Home Depot to stop selling wood from endangered forests, for example.

Due to our refusal to live within the Earth’s natural limits, we now face a multitude of problems that will have a severe negative impact on human civilization. Orr, an expert on environmental literacy and ecological design, further argues that political negligence, an economy driven by insatiable consumption and a disregard for future generations are only adding to our plethora of environmental challenges. This program was recorded in front of a live audience at the Commonwealth Club of California, on November 11th, 2009.

(PhysOrg.com) -- Seawater in a vast and deep section of the northeastern Pacific Ocean shows signs of increased acidity brought on by manmade carbon dioxide in the atmosphere -- a phenomenon that carries with it far-reaching ecological effects -- reports a team of researchers led by a University of South Florida College of Marine Science chemist.

...Principal investigator Robert Byrne, a USF seawater physical chemistry professor, said the study leaves no doubt that growing CO2 levels in the atmosphere are exerting major impacts on the world’s oceans.

“If this happens in a piece of ocean as big as a whole ocean basin, then this is a global phenomenon,” Byrne said.

The War Against Suburbia: A year into the Obama administration, America’s dominant geography, suburbia, is now in open revolt against an urban-centric regime.

In everything from land use and transportation to “green” energy policy, the Obama administration has been pushing an agenda that seeks to move Americans out of their preferred suburban locales and into the dense, transit-dependent locales they have eschewed for generations.

As in so many areas, this stance reflects the surprising power of the party’s urban core and the “green” lobby associated with it. Yet, from a political point of view, the anti-suburban stance seems odd given that Democrats' recent electoral ascendency stemmed in great part to gains among suburbanites. Certainly this is an overt stance that neither Bill nor Hillary Clinton would likely have countenanced.

Whenever possible, the Clintons expressed empathy with suburban and small-town voters. In contrast, the Obama administration seems almost willfully city-centric. Few top appointees have come from either red states or suburbs; the top echelons of the administration draw almost completely on big city urbanites — most notably from Chicago, New York, Los Angeles, and San Francisco. They sometimes don’t even seem to understand why people move to suburbs.

(Bloomberg) -- Crude oil may plunge toward $70 a barrel after failing to break resistance around $84 last week, according to technical analysts at Commerzbank AG.

Oil futures in New York have lost almost 7 percent since reaching a one-year high of $83.95 a barrel on Jan. 11. Prices have peaked in the short-term and will extend their slide until reaching a trend line linking price lows in 2009, according to analysts at Commerzbank, last year’s third most-accurate oil forecaster in a survey by Bloomberg.

(Bloomberg) -- China, the world’s second-largest energy user, refined a record volume of crude oil last year as a recovering economy increased demand for fuels.

Oil processing rose 7.9 percent to 374.6 million metric tons, or 7.5 million barrels a day, said China Mainland Marketing Research Co., which compiles data for the government. China also refined a record 34.6 million tons in December, up 25 percent from a year earlier and topping the previous high in November.

(Bloomberg) -- The U.S. faces longer power outages resulting from storms this year after utilities cut spending on maintenance by as much as 50 percent, according to Quanta Services Inc., the world’s largest builder of transmission lines.

“Because they haven’t been doing maintenance for a few years, we will see longer outages and we will see more frequent outages as storm season approaches,” Chief Executive Officer John R. Colson said yesterday in an interview in Bloomberg’s Houston office. “It’s a frequent, very frequent occurrence that cities are affected by storms that shouldn’t really affect their distribution systems, and they are devastated and they are out of electricity for days and days.”

“We are always studying the best opportunities and Petrobras is a big company and it has a lot of activities. So why not?” the minister said today in an interview in the Qatari capital Doha, where he was attending a ceremony. “Now they will discuss it and evaluate it.”

ANCHORAGE, Alaska (Reuters) - Environmental and Alaska Native groups have filed a legal challenge seeking to overturn U.S. approval of Royal Dutch Shell Plc's plans to drill up to three wells this year off the shore of Alaska, representatives said on Wednesday.

(Bloomberg) -- Chevron Corp. asked a U.S. court to dismiss Ecuador’s attempt to block an international arbitration panel from deciding who should pay damages in a lawsuit seeking as much as $27 billion for environmental cleanup.

(Bloomberg) -- A 55,000-barrel oil storage tank in Cushing, Oklahoma, the delivery point for benchmark West Texas Intermediate crude, caught fire after being struck by lightning during a thunderstorm.

The blaze, which began around 9:45 p.m. local time yesterday, was limited to the rim of the tank, Pete Schwiering, president of operator SemCrude, a unit of SemGroup Corp., said by telephone from Oklahoma City, about 70 miles (113 kilometers) southwest of Cushing. The fire may be out by midnight, keeping most of the oil inside the tank intact, he said.

LONDON -(Dow Jones)- The search for oil in the north of Angola's Cabinda enclave has been suspended after a recent attack on Togo's soccer team in the region, a partner in the venture, Soco International PLC (SIA.LN), said Wednesday.

The news underscores how the deadly rebel attack on the players who were heading to the African Cup of Nations tournament in Angola is also affecting efforts to find oil onshore in the region.

Uganda won’t allow one company to monopolize any single exploration area, Onek told a press conference in Kampala today. It was not immediately clear what the next step in the approval process would be.

(Bloomberg) -- Measures to spur green-energy jobs may end up in a new economic-stimulus bill after Republican Scott Brown’s Senate victory in Massachusetts dimmed prospects for legislation to curb carbon-dioxide emissions.

Provisions to help homeowners reduce power use and make industry more energy-efficient may be shifted out of cap-and- trade legislation that’s stalled in the Senate, said Robert Stavins, director of the Harvard Environmental Economics Program in Cambridge, Massachusetts.

“Those Democrats who may have already been nervous about a vote on climate policy are even more nervous now,” he said.

(Bloomberg) -- Chancellor Angela Merkel may have to put plans to extend the life of Germany’s nuclear-power plants on ice as falling poll ratings diminish her ability to overcome a unified opposition.

Weeks of coalition infighting over tax cuts and the war in Afghanistan have eroded Merkel’s political standing, making it harder to promote nuclear power, “the most difficult task she has on her agenda,” said Claudia Kemfert, chief energy analyst at the DIW economic institute.

MADISON — State lawmakers started poring over a sweeping renewable energy bill Wednesday, establishing battle lines as the measure inches toward a vote.

The bill creates new renewable fuel standards, lifts Wisconsin's ban on nuclear power plants and calls for new vehicle emission standards to match California's. Environmentalists have praised the package, saying it is a key step toward fighting global warming and it will create jobs.

But the state's business community is divided over the bill. Several large employers are on board, but the state's largest business group, Wisconsin Manufacturers and Commerce has blasted it, saying it could cost billions of dollars and eliminate jobs.

Hickenlooper has also said he thinks new oil and gas rules adopted under Ritter were “excessive,” which surprised everyone since the mayor’s office is pretty darn near the Capitol and no one remembers him venturing over to complain about the rules during the tumultuous legislative debate about their adoption.

Maybe that’s because Hickenlooper believes we’ll be running out of oil, anyway, since he was a featured speaker in October 2009 at the International Peak Oil Conference in Denver. This group believes we are reaching world peak oil production and that the United States has to reduce its consumption.

The onslaught of new oil discoveries just prior to and after the conference has tended to make this group look a bit silly — that is, of course, unless you’re the mayor.

Unlike nitrogen, which can by synthesised from the air, or the use of renewable energy to substitute for fossil fuels, there is no substitute for phosphorus. All the world's phosphate fertilisers come from mined phosphate rock, making it a finite resource.

Mark Twain famously said that, in California, water flows uphill toward money. But political machinations, such as the water grab that enabled the metropolis of Los Angeles to sprout in a land of little rain, aren't uniquely Californian.

Today the epic water rights battles fought in the arid West — over irrigation, drinking water, ecosystems and dams — are moving east, as a growing population and changing climate put new pressures on water availability.

Global warming has many good and bad effects, but one that is becoming especially clear is that it makes us all weenies when it comes to colder weather.

You might have noticed that this winter is cold. OK. But it's not nearly as nasty as, say, the late 1970s, which brought the three coldest consecutive U.S. winters in the entire record (which started in 1895). The last winter of any consequence was 2000-01, but that was only the 26th coldest. Where this one will wind up no one can say, but I would be surprised if it even gets to the bottom 20.

he journal Nature -- which has published many peer-reviewed research papers on global climate change -- has decided to come to the defense of the researchers.

In an editorial, and in a news feature, it talks about the "climate of suspicion" under which the scientists work. It says their work is valid -- but in the often-toxic political atmosphere in which they find themselves, they "need a sophisticated strategy for communication."

WASHINGTON – Five glaring errors were discovered in one paragraph of the world's most authoritative report on global warming, forcing the Nobel Prize-winning panel of climate scientists who wrote it to apologize and promise to be more careful.

The errors are in a 2007 report by the Intergovernmental Panel on Climate Change, a U.N.-affiliated body. All the mistakes appear in a subsection that suggests glaciers in the Himalayas could melt away by the year 2035 — hundreds of years earlier than the data actually indicates. The year 2350 apparently was transposed as 2035.

MSM usually reports the Seasonally adjusted weekly unemployment data. I have been keeping all the BLS weekly data on an xl spreadsheet for more than a year and the numbers are not as rosy as reported. It is the non-seasonally adjusted data that tells the story.
You never hear the non-seasonally adjusted 4 week Avg data because BLS doesn’t post it. I have added it to my spread sheet.

If they are not seasonally adjusted, then they are meaningful in relation to last year's and also as a way to get a sense of how many individuals are being affected. Is that right, or is there a concern that the seasonal adjustment is being adjusted?

Thanks dipchip. I am interpreting that new unemployment claims are down maybe 20%, while those who are out of work are finding it harder than last year to get work (or are there more extended claims because there are more states offering extended benefits?)

I understand the US Census has been recruiting for hundreds of thousands of part time, temporary positions. Hiring seems to have started back in 2009 and seems to be continuing in 2010. If it weren't for these jobs, it seems like results would be even worse.

This article says that 64% of the jobs have been filled to date, but that seems to be only for a local office. Does anyone have an idea of how the timing of the hiring will affect unemployment data, or what the real total numbers are. (Perhaps the numbers are so small, that it doesn't matter.)

I worked on the census last year for a couple months. I was a crew leader for the address canvassing quality control task. I covered most of one county, a good chunk of a second, and a tiny piece of a third. I had maybe 15 folks on my crew. The total population we covered must have been 300K or thereabouts.

We were quality control, so we needed fewer workers than the actual address canvassing itself. I think they had about 5x as many people. So that would be about 1 for every 4K people.

The actual census will probably need yet more people. I have got a few calls about work, but so far nothing that fits my schedule. Sometimes there is not a good mailing address for a living quarters, so the census forms have to be hand delivered. Then, if the form doesn't get returned, people have to go and encourage the respondents.

We could guess that the coming spike might be another 5x the address canvassing. So maybe 1 per 800 population?

What is employment as a fraction of population? Maybe 1 in 3? so that would be about 1 census worker per 250 employable people. I.e. about 0.5% temporary decrease in unemployment.

"Overall, a record 12 million Americans received federal and state unemployment benefits on an unadjusted basis in the week ended Jan. 2, the latest period for which the data is available. This is up from 10.9 million in the prior week."

Most OECD countries are headed toward the cliff, but some are closer than others

It occurs to me that local, regional and national governments in most OECD countries are in financial trouble, just to differing degrees. Here in Texas, our esteemed governor boasted about Texas balancing its budget, in contrast to California. Of course the Governor forgot to mention that we did it courtesy of federal stimulus money. Let's look at some local, regional and national numbers here in the US:

Council members were told Wednesday to expect another rugged year of balancing the books as early projections show the difference between planned costs and expected revenues for 2010-11 will be at least $49 million and could be as much as $108 million. Last year, the city pared payroll and services to close a $190 million budget shortfall in a $2 billion budget.

How large the coming shortfall will be depends on sales-tax receipts and property-tax proceeds. But after slashing services and staff to make ends meet in the current budget, there are no easy answers for how to fill the big hole ahead.

State Senate Finance Committee members who served in the 2009 legislative session expect the next session in 2011 to bring serious budget cuts. With various tax revenues missing expectations, and one-time-only federal stimulus dollars filling gaps in the 2010-2011 budget planned in the 2009 session, Committee members say the state’s next budget will see deep cuts and may require a dip into Texas’ rainy day fund.

“In order to balance the budget this biennium, which is $182 billion, we used $14 billion in federal stimulus money to balance it,” said State Sen. Steve Ogden, R-Bryan. “We’re not expecting a similar amount of similar money to be available in the next two years because the federal government just doesn’t have it. So, assuming that’s true, you go into the next session with a $14 billion hole.”

WASHINGTON – Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.

To use my "Sixth Sense" analogy again (in the movie many ghosts don't know they are dead and they only see what they want to see), for most of us in OECD countries, our high consumption way of life is dead, but most of us don't know it and we only see what we want to see. The problem of course is that government revenues are highly dependent on high consumption, and most budgets assume a return to increasing rates of consumption.

To repeat my ELP advice from the past three years, I would assume that it is when, not if, that your income drops by 50% or more, against a long term backdrop of rising food & energy prices. I suspect that a projected 50% plus drop in revenue is also a reasonable projection for most OECD governments over the next few years, at least in terms of inflation adjusted currency.

My income has dropped by 50%. So far, food and energy prices have not gone up much. What has gone up -- way up -- is the cost of items I spend most of my income on: debt servicing, insurance, and taxes.

. . . people who have followed some version of the ELP plan, either because of my recommendations, or based on their own evaluation of the present environment, have had considerable reasons to be glad that they voluntarily downsized. So far, I have not heard any regrets from anyone who downsized.

Or, turn it around. Does anyone now wish that they had bought a large SUV and large suburban McMansion--all with 100% financing--on January 1, 2006?

Finally, if we are wrong about Peak Oil, and if you followed the ELP plan, you will have less--or no--debt, more money in the bank, and a lower stress way of life.

Regarding oil prices, I suspect that 2009 is to our current predicament as 1931 was to the Thirties, i.e, the low point in oil prices (oil prices rose at 11%/year from the summer of 1931 to the summer of 1937). Even if, probably when, China sees a slowdown, remember that the US economy was hit very hard in the Thirties but we had three million more cars on the road in 1937 than in 1929, and it appears that world oil demand only fell one year, in 1930, rising thereafter:

I see the price of oil as being primarily dependent on three functions: (1) A long term, and accelerating, rate of decline in net oil exports; (2) A long term decline in OECD consumption; (3) A long term increase in non-OECD consumption.

...I remember reading or seeing some Texan woman saying how horrible it would be to 'live within your means...'

It seems everything in America has to be bigger and bolder, it's just the way many Americans are programmed to live.

It's all to do with 'being aspirational' and 'the American dream' isn't it?

Massive amounts of consumption has become the raison d'etre of the West (not just US) and it is spreading to China and the other developing Nations like a plague of locusts seeking to devour the resources of the planet... What happens to the swarm after the food source has mostly gone?

According to zFacts.com, the Federal debt is now $12.34 trillion, plus Freddie and Fanny losses, FED losses, and other bailout losses. Now we need to raise the Federal debt spending limit to $14.3 trillion to fund 2010 spending, wars, housing subsidies, auto help, help for the market, help for the unemployed, the poor, healthcare, and govenment employees and SS reciepiants. At the end of 2010, based on the already approved Federal spending, the Federal debt will exceed the GDP to all observers, even with the Government using every trick in the bag to hide reality.
If these expenses were one time expenses, or ending soon, it could be argueable, but until there is a will to raise taxes, stop nation building, stop housing and auto subsidies, stop inflation, and stop pandering to wall sreet, there will be a US currency crisis in our near future which will impact the price of oil imports. Rebublicans and Democrats alike have combined to bankrupt the Government to help their respective consituencies. Until we control the use of government to further special interests, nothing will change.

Both of my parents grew up during the depression, my dad lived well within his means. When he had to use credit he paid it off as soon as possible. He recently had to get a loan to put siding on the house and decided to also put in new windows. The Credit Union lady who worked up the loan was shocked at how high his credit rating was, saying that she hadn't seen many that high in the years she had worked there. He got 4 precentage points knocked off the interest rate of the loan. His plan, pay it off as fast as possible.

Frugal was how I was raised. If we couldn't get to the store to buy food, or there were none to buy, we'd still have about 4 weeks worth in the pantries. But we buy food each week, It just rolls the stock in and out. We would miss milk, and eggs when they ran out, but other than that, we'd be okay.

Living within your means has to be trained into some people a little bit harder than it has been in the last several decades.

Borrowing money does not mean that you are not living within your means. I am a great fan of borrowing money and have been doing it since I bought my first new car, a 1962 Volkswagen. It usually pays and increases your standard of living if you manage it right.

So advice not to borrow money is poor advice IMO. In your dad's case he has a very high credit rating. So what good does it do him if he doesn't borrow money? His borrowing to fix up his house was very wise since housing repair costs seem to never stop going up and it will no doubt increase the value of his house to have new siding and windows.

Please remember that a high credit rating is useless when you are dead. The credit rating of all dead people is zero whether they had a high rating or a low rating in life.

And as people approach the end of life in makes less and less sense to try to maintain a high credit rating. Generally they are living on reduced or limited income because they are no longer employed. And they often have estate wealth that is locked up in real estate or some such.

It is wise to use credit in old age to spend this locked up wealth and let your executor pay off your credit obligations after you are dead. To hell with credit ratings. They are worthless in the grave.

Realizing that for most people events happen that make some debts reasonably unavoidable, I believe you should avoid those that are. IMHO, it is more wise to have savings and cash, and to borrow from yourself. Rarely can you borrow money for less than you get in return on your investments, so paying cash from savings and then paying yourself back works quite nicely.

Debt presumes upon the future, while cash in hand gives you options. I sleep better with the latter.

The house is paid for, he will not take out a loan on that, it would be totally against his ideals. He has a line of credit at the Credit Union, He has a savings account that is kept and is growing. He has charge cards several places. But to not pay them back as soon as you can, means you are paying them more money than you got in the items you bought.

The house is willed to my brother and me, I don't want to have to pay off a loan to get it, a loan I can't afford to pay. It will be hard enough to pay off taxes due when that time comes.

Having credit available is good, having debt is bad. Using good credit ratings to get something you need is also good, but you don't use it for anything unless you NEED it.

Both my parents grew up in Alberta during the depression. The provincial government and half the local governments went bankrupt, as did as most of the farmers.

The provincial government refused to pay its creditors until it had the money, i.e. after the Depression was over. The creditors didn't like it, but they couldn't do much about it because the government had no money, wasn't cooperating with anybody, and would pass draconian laws against anybody that tried to collect. The federal government refused to provide any financial help to the province, raised taxes, and persisted in collecting more in taxes than it spent in Alberta despite the fact that Albertans had no money left and 25% of them were unemployed. The provincial government passed a lot of unconstitutional legislation, including printing its own money, and the federal government struck most of it down, but the provincial government just kept passing more and more legislation until after the Depression was over.

My paternal grandfather went bankrupt and would have lost the farm, except the provincial government stopped banks from foreclosing on farms for the duration of the Depression. The province had control over land titles, and refused to transfer them to banks. The banks and the federal government didn't like it, but the provincial government and the voters didn't like the banks and the federal government, so things stayed that way, legal threats notwithstanding.

My maternal grandfather stayed solvent, but he ended up supporting all his extended family and most of his neighbors, which amount to 50 or 100 people. He had to slaughter a cow or a pig every week to keep them all fed. It didn't bother him that much because he could only get $5 for a cow at market, and he preferred to give meat away rather than sell it at that price. People couldn't afford clothes, shoes, or new roofs for their houses, but they could eat regardless.

And then, in 1947, Alberta had the first big oil discovery in Canada, the start of an oil boom. The provincial government turned out to own the mineral rights to most of the oil in Canada and used them to pay off all its debts. The provincial premier used to add up the provincial budget at his kitchen table every year, and when he got to the big black number at the bottom line, being a very religious man, he used to thank God for giving Alberta so much oil.

Some things persist, though. The provincial government still runs a surplus most years, it still pays off its debts whenever it can, and Albertans still hate the federal government and the banks.

There is a bridge being replaced on a 2 land state highway near where I live. It was started over 4 months ago and still not one yard of concrete has been poured. It will be likely 2 more months before finished.

This is one small two lane bridge!. In other sites nearby another state twolane bridge fell down 6 years ago and was still passable. Nothing has been done to it. Nothing.

We are fast into major decline IMO here in the outback of Ky.

I went into the social services office last year to ask what was available for my 91 yr old grandmother , if I moved her here. The answer was "nothing, we are broke and you will have to get on a list". I really didn't expect much and was not suprised. Yet people move here from other states. People with several small children and no jobs and seem to get on the dole. I know of at least 4 families like that locally. The men are lazy and shiftless. The women can't even take care of their children.

Why they move here is beyond me. Some get a job with a farmer but don't last at it very long. The churches give them a few thousand here and there but it seems to not do much good.

Hard to feel pity for those who put themselves into exactly that style of life. One I knew of finally had his 4 small children removed by the state and handed out to foster parents. Kids got in a panel truck their father left in the driveway. They kicked it out of gear and it rolled down and crashed into their shack/house tearing it up. The children didn't even have clothes to put on their backs when the social worker came.

Why is Kentucky going broke? I just gave the reason in the above three paragraphs.
It is said that there are over a hundred social programs , like WIC, for indigent families or fatherless families(single mother). My son did an audit several years back for an accounting firm in that exact area. I think there were more than a hundred.

You give one of these men a job and once payday comes they disappear for a week or two then come back asking to go back to work. In the middle of harvest or spring planting that just doesn't compute.

Sorry to sound harsh and be realistic...but..I note the mexicans here tend to be far more faithful as respects their jobs and families. I speak to some of them with my marginal spanish.

Not sure about a discussion but let me state one good reason why I dislike certain types of social programs.

The setting is the Appalachian Mountains and LBJ is President.

He decided that his Great Society needed some proof or whatever so he went to the Appalachians to find it. There the folks did not consider themselves poor. They lived as they had always lived. But LBJ sat on the porches for photo-ops and I suppose convinced them that they were poor and needed fixing up.

They of course would like some money. Who wouldn't. I remember the term "Happy Pappys" from that era.

What happened is he destroyed their culture and way of life with his handouts.

I think all of this is fairly well written up but I don't have it to hand. Perhaps some google arguments might show this. Where I get a lot of my information is from actually going thru those areas, reading Foxfire books and seeing what has happened in my own part of Kentucky.

I also lived for some years in Central Ky , which was somewhat mountainous and interfaced with many of the same type of folks as lived in the mountains.

When you give people something for free you tend to 'break' something in their spirit. IMO of course and that is part and parcel of my above post.

Unless one actually visits some of these areas they do not get the same picture or sense of it.

I could put up an excerpt out of a Foxfire book but well...I believe what I believe and others can do the same as they see fit but I would state that the culture in those mountains where the terrain was the roughest has been altered by DC and their 'programs'.

These were once proud and independent mountain folk. Right now they are busy ripping the mountain tops off their cherished land. What more needs to be said then?

There are several books by Silas House speaking to what the coal mines did and the culture.
One like 'The Coal Tattoo'.

The subject is too complicated and far reaching to explore via a DB on TOD. Perhaps a Campfire would be more appropiate. How folks once survived in the roughest mountain regions of the eastern Smokies and Blue Ridge mountains. All the Foxfire addresses their lives and cultures.

Many here on TOD would not comprehend nor likely to be able to contribute much in that vein.

Someone said that my attitude was "I got mine and now you need to get yours" or words to that affect. What I think is "I got mine by hard work, why can't you do the same?"

Of course there is vast unemployment currently but not so very long ago, two years maybe?, I saw large numbers of help wanted signs in many businesses in nearby cities. In fact some of those I still see today.

I also remember a trip to a riverboat casino where I observed what appeared to be indigent(poor?) folks laying hundred dollars bills down on the blackjack tables. Or playing lotto and scratching lottery tickets while someone else feeds their child/children. Sometimes I have to wait in line to pay for my gas while they stand at the counter scratching away at their lottery or whatever it is tickets.

A friend of mine has a place of business. You would be suprised at how many who play those tickets are well known to be on disabiliy. Yet same ones can be found sawing up wood or doing other work. They connned the system. I find it distasteful and here in the same towns everyone knows everyone and who is not worth the salt in their biscuits. Why do they get rewarded for this? Try to get them to go strip tobacco or house it. You won't find a one. They are too busy playing Lotto.
So the mexicans do it instead. Make sense?

I spent the last three years working as a legislative budget analyst. I offer the following only as a personal opinion, but find that it fits the facts in most states.

The politically feasible level of tax collections for state/local government is about 10% of state GDP. Most states reached the political limit on tax rates sometime during the last 15-20 years. Hence state revenues are constrained to grow (or fall) at roughly the level of economic growth.

Expectations about the scale of infrastructure supported by state/local government -- roads, water, K-12 education, higher education, prisons, etc -- were established in voters' minds by 1970 or so. Example: California's marvelous system of state universities and community colleges predates that.

In 1965 the federal government decreed that if states paid for health care for their poor according to a federal standard, the feds would kick in half (more in poor states). I have no complaint about the goal -- as Hayek (one of the conservatives' demi-gods) said back in the 1930s, there is no reason why, in a country as rich as the US, anyone should lack for basic health care, and that government almost certainly had a role in seeing that that happened. All the states took the feds up on their offer, the last being Arizona in 1982. There are lots of other social programs, but in a macro view, their costs to the states are relatively small compared to Medicaid spending.

Health care costs have grown faster than revenues in essentially all states. Medicaid expenses have taken a rapidly growing share of state budgets since inception. Much of the 1990s was an anomaly where tax revenue growth managed to keep up. The anomaly ended in the 2001-02 recession.

States are now trapped. They've hit the political limit on their revenue stream. The voters want the 1970s level of infrastructure continued. The feds set a (large) minimum expenditure for Medicaid if states participate. It is simply not possible for state/local politicians to provide 1970s level infrastructure, Medicaid, and tax levels acceptable to voters.

It is remarkable how closely the states' respective budget holes in this recession match their Medicaid spending. In Colorado, where there have been tough constitutional constraints on spending for almost 20 years, the hole isn't quite that big. In California and New York, with far fewer spending constraints, the hole is a bit bigger than Medicaid. But at least in my mind, there is no question but what Medicaid has taken up all of the tax cushion that helped states get through earlier recessions while maintaining infrastructure spending.

Absent federal assumption of Medicaid funding, I expect to see states start withdrawing from the program sometime in the next five or six years. Some will choose infrastructure spending over health care for the poor.

It is worth noting that the federal ARRA legislation provides a larger federal reimbursement level for a couple of years. An early version of the bill required states that accepted the additional federal money to maintain a higher level of spending for some years after the ARRA funds expired. About 20 states told Congress that they could not afford to take the federal money on those terms.

These are insightful and level-headed points. Thank you for contributing.

It seems to me a lot of the political wrangling at the state and federal level over the last year is between the governing politicians (mostly Democrats at the moment) with the thankless job of retreating from many traditional commitments and those on the outside (mostly Republicans at the moment) who brand the governing party as defeatists. Governing Democrats played a similar game in the last electoral cycle. How many cycles of recrimination will we see before we get back to governance? Or will we never get there?

I think there are similar issues at the local level as well. At the local level, real estate taxes have been a major source of revenue, but these taxes tend to be falling. At the same time, people's expectations regarding infrastructure are based on what could be built when oil was $20 gallon or less. Cities are also experiencing a lot of maintenance related issues as old infrastructure falls apart, but with much higher costs now. The Headline on the Atlanta Journal Constitution today is "DeKalb [nearby county] finances hit a wall". I expect there will be a quite a few cities and counties with funding problems in the not too distant future.

You should take a look at those who are in Long Term Care facilities(aka nursing homes) and Medicaid is paying the bill. Yet some had resources and assets that suddenly become hidden and hard to find.

If they had land and income in the past why do they now suddenly not have it anymore? I suspect clever lawyers have had a hand in this.

The costs for LTC are staggering and I speak from just putting my own mother in one and shortly to take her right back out and hire in-home nursing care instead. But that comes as $20/hour. Very pricey for emptying bed pans and heating up a TV dinner. They really don't want to do any housework.

My partner came out of a lengthy hospital stay in Texas as a basket case. Through some luck and connections here on the Oil Drum, I found a place in Mexico where I could bring her and begin the work on her rehabilitation. In addition to low rent for excellent space, we have a houseful of women who help me with her and take care of the house. Their pay here is between 13-20 pesos per hour, about a dollar to 1.50 per hour, and they do everything. It has lifted my burden dramatically and has given her a new lease on life. Basically, we outsourced ourselves, and it works great. We live on social security disability and corporate disability, and the currency and cultural difference doubles or triples our purchasing power. Viva Mexico!

The easiest thing to skimp on is maintenance, and that is what the above article indicates is the problem. According to the article:

Utilities cut their maintenance budgets over the last two or three years because they are uncertain whether they will recover the costs through a rate increase, according to Quanta’s Colson. Most of the regulators who decide on higher charges are appointed by governors who may face re-election this year and don’t want to see big rate increases before the vote, he said.

Lower electric power consumption (as has recently been taking place, because of the recession) tends to lead to higher rates, because fixed overhead costs need to be spread over a smaller base. Adding "renewables" also tends to push electrical rates up. If consumers are have a hard time accommodating the needed rate increases, the tendency for utilities may be to try to make up the difference by cutting back maintenance--leading to power failures down the road, and longer downtimes before storm-related outages can be repaired, because of smaller staffs.

If my income were to drop 50%, with my parents still living I could handle it. I live with them, we share costs. If they were not around, I'd have to start selling off things on an ebay store to get living expenses. My current income is less than $8,600 dollars. Take half away and that will put all my money toward paying land taxes and other have to costs.

I had this story idea of US citizens being tasked to live on $2.00 per day for food, clothes, hair care products, etc. They would be given a house to live in or apartment, even given a car to drive but only with 10 gallons of gas a month. What would people have to change about their living habits to live only on an income of 2 dollars a day?

If they planted a garden, supplies for it, have to come out of the 2 dollars a day, so they have to think about getting lots of things for free and being careful what they spend money on elsewhere in the home.

I planned to work up a story line where several different families were looked at to see where they had to make changes. It would have been fictional, but a thought experiment none the less.

I don't have the money to run the idea in the real world. A lot of Homeless people get by on less than 2 dollars a day in the USA, but I wanted to use people that are run of the mill regular folks to get them to think about how they can cut back and how they would live.

I've been waiting for someone to write an article juxtaposing the "right" to live wherever one wants with "freedom".

Of course, the two concepts are entirely different.

If someone really wants the "freedom" to live wherever they want, they ought also to realize that nobody else should be required to support their choice - e.g. why should I, as a taxpayer, support the infrastructure needed for folks to live in a far-flung ex-urb, at huge cost, when I could be supporting my local infrastructure, for eaxample, to build transit ?

I infer, also, from the article, that the current administration must understand peak oil, and be trying to do something about it, or the opposition wouldn't be writing polarizing treatises to try and stop their efforts.

A year into the Obama administration, America’s dominant geography, suburbia, is now in open revolt against an urban-centric regime that many perceive threatens their way of life, values, and economic future.

I guess if they win the *WAR* they will have the option of repealing those ever more unpoular laws of thermodynamics that the urbanites seem to be imposing on them.

Bah! To be honest I find that the word "war" seems to have totally lost its usefulness to the English language as used in the US.

I've begun to view politics in the US as nothing more than a football game.

The team with possession of the ball tries whatever they can to get the ball over the line (pass legislation). The other side tries everything they can to stop them, while, at the same time, trying to take possession of the ball.

The only beneficiaries to this sport are the players, and those making side bets on the outcome.

Maybe it also provides some entertainment to the spectators, and support for a lot of media reporters..

You can extend your analogy to the fans(voters). Each fan has chosen what team they are supporting and no amount of arguing or debating with fans supporting the opposing team will change any minds about which team is better.

I like this whole analogy. It boils the issue of policy choices, setting a direction for the future, and dealing with major crises down to nothing: the only point is to get across the goal line. It doesn't matter which one of the game balls you're using. This pretty much summarizes the health care policy debate.

Here's an extension based on watching the Ravens lose last weekend. There are occasions where fans can watch the team lose, look at the calls by the refs, look at the penalties, and grudgingly admit, yeah, my team made some illegal hits, got caught, and lost. Still doesn't make the fans change the team they're rooting for, though.

Well, my preferred living arrangement would be to live in St Thomas overlooking the ocean, and commuting by jet every day to the office. What's that you say? This isn't realistic? Why won't you build that new airstrip to support my commuting habit?

It becomes a question of the lengths that people will go to support their decisions. Ultimately it could come down to some irreconcilable differences. For example, would you support a resource war to seize oil from some foreign country to make it possible for us to have cheaper oil?

In the short term, I see local governments so strapped for cash that they can't even see straight. So road maintenance is going to be one of the first things to go, and this isn't going to make the suburbanites very happy either.

We already see governments cutting transit operating budgets - the net result is reduced service. Any thought of extending transit to suburbs to get people out of cars isn't realistic.

I imagine that the suburbanites will hold out hope for electric cars or some such.

The most reliable transit that each of us has at our disposal is what we can do on our own and for which we don't need an external infrastructure - that means walk or bike. But this really only works well in urban areas.

For God Sakes! Joel Kotkin is a single-note Johnny constantly harping about suburbs = good, cities = bad. I honestly don't understand why suburbs are labeled as representing good old fashioned (conservative) American values while cities and their residents are ideological elitists. Politics and land-use seem strange bedfellows.

At the moment I am researching the relationship between energy, transportation and land-use, along with demographic, market preference, regulatory and financial policies that are driving shifts in where and how people live and work - it's for a real estate investment fund. Anyway, what I've found thus far is that an economically significant portion of households (20%-30%) would prefer to live and work in walkable, mixed-use communities that provide multiple transportation alternatives. Yet, the supply of such housing is significantly lower leading to unaccommodated demand. Further, these trends all point increased demand for these communities in the future.

Supposedly, the free market provides choices yet our land-use precludes choice by law, zoning typically restricts anything but auto-centric development making mixed-use walkable communities literally illegal, where;s the free market in that? Think of all the different restaurant and hotel brands there are - each designed to capture increasingly small market niches. For housing the choice is predominantly a single family dwelling that comes in either beige or off-white. For the mixed-use "smart growth" communities that do exist, they have demonstrated value premiums that reflect their strong demand and limited supply - pure market fundamentals.

I agree that some of the proponents, e.g. Leinberger and Nelson have pro-city, urbanist bias and their research and conclusions reflects non-documented assumptions. Yet they have accomplished much to advance new urbanism and demonstrate its viability for a large segment of households and businesses. In any event, I'm glad for ideologues like Kotkin because he generates market disinformation that enables people like me to invest in promising strategies without a lot of competition.

I think people want walkable, mixed-use communities with transportation alternatives...but they also want big houses with yards and neighbors that aren't too close.

I have a friend who grew up in a row house in Boston. When he was house-hunting, he refused to even consider a house that came with less than 5 acres, because he didn't want to hear his neighbors any more. He is otherwise a leftwing nut.

I'm reading a book now that suggests Americans' love of suburbs is a yearning for their rural past. Instead of the back forty, we have back yards. Dunno if I buy it, but it's an interesting idea.

Urban areas are necessary to provide the population density and specialization to support technology, but are generally more crowded (with the accompanying dirt, noise, etc) than most people prefer. Suburbia grows as wealth and technology allow. US cities began growing suburbs of wealthy people well before 1900; transit technology such as trolleys and eventually the auto made it possible for the middle-class to get out of the urban core also.

In the last century, electricity and modern production techniques made it desirable to move some kinds of industries out of the urban core. A "factory" powered by a single large steam or diesel engine typically grew upwards because it was easier to transfer power vertically with mechanical systems (belts, pulleys, etc) than to transfer it horizontally. Assembly lines tend to work better all on one level, and electricity made that practical. Large one-level assembly lines are unaffordable in the urban core because of the price of land. And once a lot of jobs moved out, people were going to follow.

It's not just the sight, it's the sound. I do think the fact that America has moved from rural locations to cities over the last century is a part of this as well.

The constant drone of cars and conversations becomes very difficult to tolerate after one has lived in a lower density setting. I lived next to an Interstate for 20 years and the only way I could sleep was to wear ear plugs. Without them, one truck with a loud muffler every 15 minutes would prevent deep sleep. That has long term psychological effects and the resulting stress may have contributed in my father's serious illness, which eventually led to his death. Admittedly, ours may have been an extreme case, but still, with more than 140,000 vehicles passing by every day, the strain can become unbearable.

I now live on 2 acres way back from the highway and can still hear the neighbors' speech from several lots away if I'm outside. My super insulated walls provide considerable noise shielding when inside...

Yes, you can all anything suburban but what the outsider calls it and how the people living there define it are likely very different beasts. Kotkin plays to how people feel about where they live which further reinforces the meaninglessness of the terms.

Here in North Little Rock Arkansas, over on Main St, a Lady bought a building to put her bead shop in, and rent out the other half. She put up a nice colorful sign and the town fathers told her they didn't want that there, made the place look cheap and it was bigger than code allowed. She then painted her building bright Purple. They liked that even less but coulded say anything about it. My Aunt who is in on the local planning group told me about it, saying she didn't much like the bright purple building either.

I Love the color, it brightens up the whole block and makes it cheery.

More power to the people to paint their houses in bold bright colors and shock others.

Interestingly, it seems to be the "urban elite/Greens" who are trying to tell everyone else how they should live. I've never heard anyone from suburbia or from my small town say that everybody "should" live in suburbia or small towns. I think that's at the core of what is so overbearingly offensive to people from small towns and suburbia. We're not trying to control how other people live and we don't believe we have any right to try to control how other people live. It's elitists like the urban-centric people in the Obama Administration and in the "environmental movement" who have the arrogance to assume that they know how everybody has to live.

I can deal with the challenges of living in my small town. I have the most fuel efficient car made and I don't waste anything. One thing's for sure, no one will ever get me to move into a large city. Besides, there aren't any 100 yard rifle ranges in any of the cities that I know of, but then, I guess that's one more giant "cultural problem" for the elitists to "fix".

As a urban green who spends time telling those in suburbia they should live more sustainable lives, I can explain to you why I do so:

Suburbanites are perpetuating an energy-intensive way of existence that will result in the destruction of the climate and the collapse of our economy and probably government as well. Since I share the climate, economy, and government with these folks, I see no problem in trying to change their behavior. In fact, I consider it my duty to do so.

Are you concerned about the density, the houses, or the lifestyle? Improving each would face significant challenges.

How's that "telling those in suburbia" approach working for you? I can see educating those willing to listen, but around here any city person "telling" you something is going to have the opposite effect.....and that's just suburbs vs city, not rural vs city.

Good question. To be convincing, you have to make it more attractive than what people already have, either because it's cheaper, provides more free time, makes you healthier, is more beautiful, etc. And you start small. Something like planting a few blueberry bushes that will produce thousands of pints of organic blueberries over the course of their productive lives (and produce a potential financial return of several hundred % annually) is pretty easy to convince people of. Low maintenance, attractive, healthy activity, etc. If a household can go from a two-car to a one-car household and use public transit and bicycling more, it saves in the neighborhood of $8,000 year, which can go a long way towards helping with the mortgage payment, not to mention be some great preventative exercising.

Of course, you start with those who are willing to listen. Then they go back to their neighborhoods and start changing their houses and lifestyles, and people there realize it's possible for them to change as well.

While I believe in a well armed proletariat to keep the storm troopers thinking about what will happen as they crash through your door (I have venison in the freezer), most suburban types are clueless as to how things actually work, and would be bewildered when thy could not fill the F 150, or go to WallCrap for a case of Bud.
I see no resilience in suburbia, and little in rural America.

As someone who lives on a few acres, twenty-some miles from the nearest sizeable town, I spend a lot of time wondering how I will live twenty years from now. Like many of us who bought into the "country lifestyle" -- and it is a "lifestyle" because I don't have enough land to do anything more than subsist, were things to fall apart -- I depend on a day job to make mortgage payments, cover my health care costs, put food on the table, pay the vet bills, etc. etc.

The question I've repeatedly asked myself is "what is my house and property going to be worth in a oil-short world?" I'm not just talking market value. I'm talking about utility. What does my little piece of heaven really have that might sustain me and mine over the long haul? I have a few acres of crappy second-growth forest, a water well that requires an electric pump and an acre or so of open land that is marginally suited to growing crops. The inescapable answer seems to be, "not much."

With the addition of a hand-powered water pump (in the works) and an outhouse, we could probably survive. But prosper? No way.

Another thing that folks might want to consider when making their "power-down" plans is their health.

I have spent the last 16 years on my 15 acres of NH, heating with wood, working my woodlot with my horse, building nice organic gardens, all that good stuff. You get the picture. I was hale and hearty at age 53, looking forward to years more of getting my system all humming along smoothly.

Then, in October of 2008, the stuff hit the fan. One evil morning, pre-dawn, my wonderful and beloved horse coliced and died, and later that same morning, I received the diagnosis that my left internal carotid artery had "dissected" massively (i.e., split open). I had been having really nasty headaches (like someone pounding an ice pick into the side of my head behind the eye) and finally went to the doctor, got NMR scans and CAT scans and blood tests etc.

Anyway, since then, I can barely maintain my garden. I have to purchase firewood (this kills me). I can't really keep the snow shovelled. Etc., etc. 15 minutes of moderate exertion and my head is pounding, I get dizzy, and start seeing double.

This was abso-friggin-lutely not the plan AT ALL! The "homesteading" life is a very physical life, one that I love(d). When you can't get 'er done any more, it's sort of, well, awkward. My awesomely competent woman has been able to take up some of the slack, but it's not the way we planned it, and it's not real happy-making. I also happen to have neighbors that can only be described as awesome. We'll be able to stay here on the place, but it won't be quite the same...

The point is, this kind of lightning can strike any of us at any time. And in any case, we will all grow old - well, I hope I get to!

What will you do when your lifestyle demands physical exertion that you simply can't manage any more? Retire to Florida? :-)

Seriously...I've been thinking about what old age will be like in the future, and I suspect it's not going to be pretty. With smaller families and a huge aged population, it's going to be hard to care for the elderly. The end of retirement, sure...but what happens once you are actually incapable of working?

When my neurologist showed me all my NMR and CAT scans and explained what was going on, my very first question to her was "umm, why am I alive?"

It turns out that the plumbing in your head is rather more complicated and interesting than you might think. You have 2 carotid arteries, and they, along with the basilar artery from your spine, feed into sort of a manifold pipe (google 'circle of Willis') that then serves the brain. So you can get by on one. Sort of :-/ I was lucky in that everything scarred over smoothly and no chunks went downstream. I.e., no massive stroke.

Here on the old homestead, the chores tend to be rather seasonal. It took me a whole year to figure out all the things I couldn't do any more. Like I said, pretty awkward...

It is one of the reasons I like living with my parents, when they need help I am here to provide it.

My dad would love to have a 'truck farm' patch as he calls it, about 10 acres to put in loads of things and tend to it. He's going on 74 and still rather active, even wanting to step up his activity level some.

It is one of the those cases where if you had a trusted sort of person handy, they could come stay with you, live in a workshed home nearby and help with things to make all of your lives easier.

I expect the birth rate may actually increase, because of this issue, and marriage will return to being the norm for most adults.

My husband and I took care of my husband's unmarried aunt for two years before her death, but I don't think many unmarried women many can count on relatives to do this. Taking care of one's own parents is enough of a burden. If one has to add to that aunts and uncles without children, siblings in poor health, and adult children in poor health, employed people are going to be overburdened by those who cannot take care of themselves.

I am afraid that a lot of people who cannot take care of themselves will basically be left to die. Unless a society is rich enough to take care of everyone, it may be forced to abandon the least capable.

I have spent a good bit of time talking to the older generations now gone about how people lived out thier last days a few generations back.

The upshot of these talks is that most of them were soon dead once they got to the point they were no longer able to look after themselves easily.They simply couldn't hang on very long doing everything that had to be done just to survive and more or less worked themselves to death.Just gathereing enough firewood by hand to keep a drafty shack heated and for cooking was a major job in itself.

Nieghbors and family mostly did what they could to help but on a long term basis it just wasn't enough.

A fair number however did live to a very ripe old age as the result of moving in with thier children, or maybe a grand daughter moving in with them.

One of my sisters is a nurse with long experience and she says that while it is not admitted or discussed much publicly,medical rationing is an established fact now and that it will grow progressively worse , and fast, in the next decade.

There must have also been cases where there were no kids in the picture to take over the farm, so the old-timers would sell off the farm and just buy a little place in a nearby small town. Maybe raise a small garden and a couple of chickens for as long as they could.

There were also a few "old folks homes" in the old days, too. Nothing like a full fledged nursing home, but housekeeping and meals were taken care of for you, and there would be someone to help you from your bed to the rocker on the front porch and back again. Something close to "assisted living". I guess.

Interesting story. Trouble is, it's obviously just a story. Consider that the narrator went to the cabin to take pictures of the cabin for his employer, the insurance company. What he saw supposedly dumbfounded him. Yet, he took no pictures of "woods helper", when he has a golden opportunity to capture the moment. The writer claims to be aware of various "species" as well. After writing this experience down, why didn't stop back for a later chat?

Of course, there are a few strange looking folks around here too. Birth defects or too much inbreeding, perhaps...

As we get poorer from Peak Oil I expect the life expectancy will decrease. Who will be able to afford expensive medicines, expensive emergency services, and expensive diagnostic machines? If we go with single payer in the US economic problems for government will force rationing of services.

I expect these factors to return us closer to a demographic more like the past. I doubt it will get as bad as the era when social security was adopted when they expected most people would not collect because they would not be alive by 65. Two other issues are that we understand many health issues better than in the 1930s and antibiotics will still be available both issues should increase lifespan.

Yes, I fully expect rationing of healthcare, especially at the far ends of life (the very old, and premature babies).

My grandmother was just put in a nursing home. She's nearly 100, and no longer knows her family. She showed no signs of dementia until she had surgery that required anesthesia. This is not unusual; anesthesia kills brain cells, and while a young and healthy person will adapt, an older person may not be able to. The surgery prolonged her life, but I wonder if it was worth it.

My mother's memory began to fail after she had a pace maker installed. Maybe something got jiggled loose and went to her brain. The symptoms seemed to be more mini-strokes than Alzheimer's. She couldn't remember what had just been said, so conversations tended to be two-minute repeating loops. But she remained more or less herself to the end, and either knew us or faked it nicely (she was good at that -- let her listen to a conversation and comment occasionally and you'd never know anything was wrong). Toward the end, she couldn't distinguish between dreams and waking life. Failed to wake after a midday nap; we buried her on her 88th birthday. I hope my body dies before my mind does.

A similar thing happened to my Dad; he had surgery at 83 and was never the same for the month he lived afterward. He was paranoid and fearful and had to sleep with a light on. I found out afterward major brain cell loss is very common for elderly people as a result of general anesthesia. Funny how the anesthesiologist failed to warn of this beforehand.

That's been my experience, too. They know about it. If you Google it, it's in the literature. But they almost never mention it to the patient, or their family. (I also suspect this is what happened to President Reagan. The surgery after the assassination attempt - that can't have been good for someone with undetected Alzheimer's.)

I first heard about this from a friend who was furious that the doctors hadn't told her. She was a medical receptionist for a psychiatrist, and she hadn't heard about it. It was only after her mother came out of heart surgery with her previously mild dementia far worse that my friend did some research and found out about the link between dementia and anesthesia. If she had known, she would never have agreed to the surgery.

my favorite neurologist said he would never have open heart surgery as he did the exams/treatment and often for heart surgery it was the machine's blood flow that was the problem. so that would be for any age- he was young.

Well I could be wrong but if you were raised in the country you were naturally pretty healthy.

Doing good physical work and eating well went a long way. If you got real sick then you might die. But by and large illness was less than those who lived chockablock together and don't even know the next door neighbor.Most work done might be riding a lawn mower or a golfcart. But going it alone or without children? I don't see how it could work.

I was 70 before I was ever admitted to a hospital and now with one less kidney I still am hanging in there. I still take no medicine to speak of. D3 and vitamins. Sometimes a over the counter pain pill. Some aspirin when needed.

Seriously...I've been thinking about what old age will be like in the future, and I suspect it's not going to be pretty. With smaller families and a huge aged population, it's going to be hard to care for the elderly. The end of retirement, sure...but what happens once you are actually incapable of working?

If you can't have your kids living with you, there are other options. We'll probably see a lot more cases of unrelated people living together - something like "The Golden Girls", maybe. They'll try to make sure at least one or two of them is still young and fit enough to drive, and as the oldest/least well die off, they'll bring in younger replacements. This will become far more common once the price tag for the retirement communities starts receeding out of reach for most middle class households.

There will also be a lot of cases of oldsters working out deals with younger people - room and board, and maybe a little money, in exchange for help around the house and some caregiving. This will offer a lot of good opportunities for young people who are frozen out of the full-time employment market. Combine a deal like this with one or two things they can work on the side - a craft of some type, or some free lance work, or whatever - and they should be able to get by fairly well.

What will you do when your lifestyle demands physical exertion that you simply can't manage any more? Retire to Florida? :-)

Hah! A good friend of mine 59 years young and fit as a horse was working in his shop here in Florida last December suffered a massive heart attack. They found him a few days later when the bay next door complained of the smell. I'm going to be 57 this year and am no stranger to hard work in the hot sun.

I'd love to see what happens to some of those retirees when TSHTF and the air conditioner goes out, my guess is they'll be dropping like flies...and they won't even have to exert themselves.

A few well brought items and some fuel storage will help as you get older.

A good Jeep Wrangler for one. A gas powered log splitter for another. A shed to store you cords of wood so you can harvest it at any time. A good small tractor to save you back. Mine is IH 140.
I have a front loader on it so I can go in the woods, sawup my log blocks and carry out with the front loader. Split them at leisure. Store in the dry.

Of course those will soon be obsolete but by then I will be too. Stay away from crowds if possible. Church can be an easy place to catch a lot of germs. Sit in the back and quit shaking hands with sick folks.

In the past 'extended families', your relatives , neighbors and your children pitched it. But over the long haul without offspring to take care of those events , even permanent ones, of course you will NOT MAKE IT.

Anyway thats the way it was in my youth. Me and my brother were abandoned by our mother during WWII and we lived with many kinfolks and mostly with our fathers parents. We did work though yet we survived easily.

How anyone plans a permanent sustainable life in the country with offspring is a mystery to me.

To this very day neighbors, relatives and church folk would bring me food and assistance if I simply allowed them to. I don't allow them to except rarely when I can't refuse.

Like today I was given 4 2lb rolls of homemade pork sausage , just for helping fix someone's computer. Hand butchered sausage where they killed their own hogs and ground it themselves.

Going it alone in the country will IMO just not work out unless you intend to die or perish on the place when you are disabled short or long term.

As a youngster me and my cousin walked a gravel road all summer long to milk 12 cows for a neighbor who lived a mile and a half away and was in the hospital. We did it for free. Strained the milk and put it out in milk cans for pickup. Fed the bluejohn to the hogs.

The secret to country living is to be born there and everyone know your name and relatives. Otherwise you will face a very hard time without your own 'family'.

Airdale-at 71 I don't intend to ever leave this place of mine alive, I am still recovering from H1N1 and alone. Ready and waiting for spring to plant my garden. May be my last one? So? I am ready. But I do stop and see my aunt up the road and my cousins when I can.

You are right about the "secret to country living", more or less. I wasn't born here, but I've been here a good long time and have tried my best to be very open and visible and on good terms with any and all. I feel that I'm a known quantity and considered a right guy. I hang out at the corner store and banter with whoever's there. I deal locally whenever it's remotely possible. I've done what ever I could to help folks around here who needed a hand, and for sure I've received plenty of help myself, especially since my carotid artery unravelled.

Like the other night when our road turned into a frictionless piece of slick ice (you could not walk on it, and I'm not kidding) and I put my truck into the ditch on the down hill following an exciting 360+180. The farm manager of the neighboring establishment saw me floundering around, and came down in the ginormous tractor and got me out in no time. Because for the last 16 years I've bought my hay from him, and helped his kids learn how to harness and drive a draft horse, and always stood around and chit-chatted with him whenever he had a minute. But no, that's not quite right. Bottom line, we're friends, and that's all there is to it.

Airdale, at a relatively young 54 (I know, just a pup!) I consider every Spring could be my last garden planting, especially after my medical event. But for every Winter I make it through, for sure there will be a garden planted in the Spring. That is as much faith as I can profess.

I don't ever intend to leave here. If I drop dead tomorrow, or cruise for another 30 years, that's my whole life.

Like the other night when our road turned into a frictionless piece of slick ice (you could not walk on it, and I'm not kidding) and I put my truck into the ditch on the down hill following an exciting 360+180.

Those of us with more experience can skid a truck down a hill, do a couple of 360s in the process, and park it behind the house without damaging anything important.

I've skidding about four blocks backwards down a street in a major city, parked the car, and walked home without incident. My brother later managed to get the car home, although he had to run through a red light at 60 mpg to get enough momentum to clear a hill. He was always more gutsy than me. If you grow up in the right circumstances, you get pretty good at this kind of thing.

The only time I had a car accident on ice, I was standing beside my car talking to a friend, and a pizza delivery man ran into it travelling sideways.

Another thing that folks might want to consider when making their "power-down" plans is their health.

A similar thing happened to me. At age 61 and very healthy, I developed Parkinson's disease. This is one reason I don't post much, the tremor makes it difficult. Even if Deep Brain Stimulation (DBS) works to stop the tremors, the deterioration of the dopamine-producing part of the brain continues. Uncertain prognosis even if nothing else serious happens healthwise.

You've reached a level of analysis that most of the "f 'em we got the guns" crowd can't quite comprehend.

This goes back to discussion of political (football) "teams" up thread - many on both sides could care less about understanding details of various issues - all that matters is that their team is the winner.

Same goes for the "we got bigger guns" crowd (which I would argue is quite debatable in a clash between rural vs. urban gun "owners")... They appear to be forever stuck in a loop of the fantasy where they are standing on mountains of bodies with the barrel of their rifle still smoking from what they've just accomplished...

But they never seem to get to the "ok, what now...?" part of their own action hero movie... Because that doesn't matter - their team just "won"...

If that's the kind of civilization we have to look forward to I think I'd rather be counted amongst the "losers"...

Well, I count a weapon as a necessary household item. Maybe that marks me as a paranoid red-neck but that's the way I am. I grew up with them, I'm comfortable with them and I would feel nekkid without one. That's not to say I'm eager to put it to use in defense of the domain. In the end, it won't be our firearms that save us, but rather our ability to forge relationships, innovate and learn to make do. Who the hell wants to live in a free-fire zone? I sure as hell don't.

You really don't need to convince anyone the state and local govt's are and have been cutting road repairs and or replacement and new road construction and the recession will delay projects for a decade or more.The anti-tax protest that politicians running for office are facing will pit them against the suburban interest using taxpayer money for new developements.Besides if you live long enough you don't want the cost of large land/home upkeep errr boomers.

The government is actually in control of where people live, because unless you're the Unibomber, you aren't going to live without infrastructure: water, sewer, roads, schools, electricity. It's the government that generally builds those things, or at least subsidizes them.

It reminds me of those people who complain about Amtrak subsidies...when highways and airports would not exist without government subsidies, either, but no one complains about that.

I think you're also right that as the boomers age, there will be more interest in urban living. A large home becomes a burden, and living somewhere near medical specialists and where you don't need to drive becomes more appealing.

And if peak oil really does make living in the 'burbs unaffordable...people are probably going to blame the government for allowing all those far-flung exurbs to be built.

I could live just fine with an aerobic system and greywater recovery, gravel roads, and small local schools -- heck, I grew up that way. Today I'd add off-grid solar before I'd move downtown -- and still come out dollars ahead versus real-estate costs.

Water is a critical issue, though. It's probably not feasible to have personal wells, but if that's the only infrastructure issue I think we'll manage for quite a while. Residential water isn't a huge fraction anyway if you stop watering the grass.

For middle-class families with children, schools is the issue. Fix that, and family living in an urban area becomes reasonable. Today, it simply isn't an option. You're really paying for an invisible fence to keep the urban poor kids away from yours, and sadly, it seems to be the only way to accomplish this on an individual level.

For the elderly and retirees, a non-driving existence would be preferable.

I think we have a ways to go before energy costs collapse suburbia -- it may be a better-insulated, single-car, EV-based, park-and-ride suburbia after a while, but the "pluses" will persist for quite awhile.

I agree that the pluses will exist for awhile...but, at least ideally, it's the government's job to take the long view. (Which may be one reason democracy is ill-suited for sustainability, but that's another subject.)

Jared Diamond argues in Collapse that once a society reaches a certain size, it becomes too large and/or complex for any one person to understand the problems it faces. That's why medium-sized societies cannot be sustainable. They are large enough to have big problems, but too small to support a bureaucracy that can deal with them. A person in one area may not even be aware of a problem in another area.

A larger society can support the societal infrastructure it takes to monitor all parts of the society - keep an eye on the big picture, as it were.

In short...it's the government's job to do what's best in the long run, because people who only want a big yard or a good school can't see that big picture. And eventually, when those pluses become huge minuses, there will be hell to pay.

the problem with this concept is that governments are not neutral detatched benevolent entities standing outside the arena making everything work right inside the arena. They are 100% interested players in the game themselves. Governments are just like _any_ power structure, a more complex form that emerges when the conditions of available surplus, sufficient stability, suitable raw materials (including people), etc are present and mix the right way. Governments need to feed themselves just like any other large hungry beast, and any government (or any other power structure for that matter) that has any aspiration to stick around will end up acting in its _own_ interest. It is a utopian fantasy to think that the government's interest is the same as the peoples' interest, just as much as it is a fantasy to believe in the idea of 'government of the people'. Beyond a tribe or a village, that simply does not scale, period.
Nevermind that when governments (or other such structures) get complex enough, typically a lot of niches open up here and there for further optimizations, which we usually call corruption. Making a bigger beast or enabling one to get bigger thinking it will solve your problems might work temporarily - if you fall into one of those niches - but in the end even more of the total share of everything in the arena is swallowed up into that great beast. If someone else manages from his niche to prod this beast to roll over in a different direction it will just as soon crush you as it crushed others for you.. and if ever that monster gets the idea that you are in its way, or have something it would like to snack on, then it will devour or destroy you without a thought.

It's not the government's job to do what's best in the long run or make the sun shine and the birds sing. At best, it's the government's job to preserve and expand the power of the government.

At best, it's the government's job to preserve and expand the power of the government.

And that is the only reason we can expect them to take the long view. It's in their interest to do so, because as Tainter points out, once a government ceases to provide materially for its people, it won't last long.

I can fly a private home built airplane from the public airport and fly in the public airways. I can drive my motor vehicles on the public roads. I can start an airline and use the public airports and public airways to transport other people/freight. I can start a bus line or trucking company and use the public roads.

I can not make any use of the publicly subsidized privately owned railroad tracks other than to ride at (partial)taxpayer expense for the ride and the privately owned trackage.
That's the difference that cuts me to the quick.

Make the railroad tracks and railroad (national) rail traffic control system public domain like the roads and airways/airports and then you will get my support for subsidized rail service.

Make the railroad tracks and railroad (national) rail traffic control system public domain like the roads and airways/airports

That would pretty well get our Federal government into the business of running all forms of transportation. You didn't mention that you could start a barge operation on the Ohio or Mississippi Rivers for example, and pilot your barges up and down the waterways hauling commodities thanks to the work done by the Army Corps of Engineers over the decades on our rivers. So barge traffic is also subsidized.

I don't know if government takeover and operation of railroads (as happened in World War I) would level the transportation playing field or not. Maybe we should go in the OTHER direction instead to level the playing field, and get the Feds OUT of the transportation business. All roads become privately owned toll roads, or taken over by states and cities (like that'll happen). Airports and ATC are handed over to the airlines and to cities (like THAT'LL happen too). But I think it would level the playing field, and the economic efficiency of steel wheels on steel rails would pretty quickly become apparent (once again) to our economy. Sure, there'd be grumbling about the loss of "freedom", but that's gonna happen sooner or later anyway.

Actually, none of those need to be run by the government, nor by corporations. You could have each system owned and operated by a board of trustees, directly elected by the public. This would essentially turn them into cooperatives. Nobody has tried this, but to my way of thinking this would actually be the best way to do things. By not having the government own and operate these, you leave the government free to administer regulations that protect public safety and the environment, without any danger of any conflict of interest. Because these would be non-governmental, there is some market discipline, but having a board directly elected by the people establishes a political feedback mechanism as well.

Well in full 'power down' mode:
Water: Get near a spring or have a well you can draw a bucket out of.
Sewer:Pipe your outhouse runoff down the holler or just the outhouse once in a while.
Roads: Ride a mule or wagon. Done best on dirt roads. Gravel is hard on hoofs as is concrete.
Schools: Don't have to go. Teach em at home.
Electricity: Burn wood, no more than necessary,get your place next to a good woodlot you can manage.

Are you trying to be sustainable or just reinventing the burbs in the outback?
I still have an old ThunderMug. Better known as a chamberpot. Never use it though.

Airdale-I know it all sounds tough. It really wasn't that bad. We had a three holer.

Sheesh, Stephen, when are people like you, going to get it through their thick skulls, that this energy-intensive way of existence, as unsustainable as it is, IS NON NEGOTIABLE!!! Are you trying to start another war or something?! /snark off

Urban environments are extremely energy intensive as well, do you take into account the energy required for transportation of food, transportation of people, power for industry, etc? You may walk around on foot, but where were your clothes made? The energy required for suburbia is probably only marginally more for transportation at best. Even if we all decided to use less energy, would it really push peak oil back that much?

I think it all comes down to jobs. People need to be close to their work, or vice versa. If you have no job, then land (the more, the better) is the best you can do.

Slums the world around are the result of no job prospects for the landless poor. We middle-class tend to have an elitist view of such places, but most are there due to profound effects of capitalism (and I say this as a free enterprise believer - not exactly a global capitalist believer, though!).

Really the goal shouldn't be to eliminate houses in the suburbs or force people to cities -- it should be to decrease the gap between haves and have nots, such that reasonable options and choices are available for all. For those of us that are "haves", this will be less pleasant than for those who are "have nots". We can't all be rich, but we could all be poor. The average, world-wide, is unfortunately the latter. That is what sucks.

In the past if you were a single dude you did 'hired hand' work.
Usually a pittance and your room and board free.

I remember a lot of folks worked for others on their farms that way.

Word got around that so and so needed some help fencing. Or butchering hogs. A lot of barter in
work and provisions worked that way. Lots of it. In fact there are still a few hired hands around here living in a old house the farmer owns. They don't get rich but they do get by.

Now days you'd probably get in big trouble with the government if you tried to do that. They would consider the room and board to be "compensation", taxable to the employee. They are supposed to get minimum wage, too. Be sure to deduct federal and state income taxes, social security taxes, medicare taxes, and unemployment taxes from their pay, and send it in. And you had better make sure that they have proper documentation for the immigration enforcers.

I guess we should be surprised that anyone is still employed in this country. . .

Actually, when it comes to industrial agriculture, the suburbs are the wheels of a city-based hub. That is, most of the food that makes it into the suburbs goes through the city first, either by rail or by truck, where it is first brought into the city, broken down and then shipped to the far-flung burbs.

Generally contrasting urban vs. suburban living in a detailed scientific way has fortunately already been done. Urban living is about twice as efficient as suburban living. I would imagine that if we cut our fossil energy use by one-half, that would provide a pretty substantial cushion of time for transitioning to a renewable energy economy.

Read my source by googling: "Comparing Low and High Residential Density: Life-Cycle Analysis of Energy Use and Greenhouse Gas Emissions" published in issue 132 of The Journal of Urban Planning and Development.

That is, most of the food that makes it into the suburbs goes through the city first, either by rail or by truck, where it is first brought into the city, broken down and then shipped to the far-flung burbs.

Although I'd be willing to bet a small beer that when that large, sprawling, industrial warehouse district was established, it was on the very edge of the urban area. The fact that it looks central now may well be a matter of subsequent growth, not original planning. I'll use Denver as an example: the core industrial warehouse area is now in roughly the center of the metro area; but when it was established, it was out on the far NE fringe. The major grocery warehouses are closer to several of the inner ring suburbs than to the farthest parts of Denver.

Good point mcain. I suppose it varies greatly from city to city. Houston has had the good fortune to be in a nearly continuous growth position (except for the oil field slump in the early 80's). Most of the big distribution centers are now at the edge of the metro area due to cheaper land costs I imagine. Houston also might not fit the mold of the metro vs. suburban debate. While it might be the third largest US city it's not as "centered" as many cities are. The d/t town metro area is rather small compared to other cities especially in the NE. The majority of workers don't work d/t. A very large portion of the city lives and works in the burbs. In that sense we are more of a collection of cities shoved next to each other. In fact, the continuity of Houston stretches across county lines...and we have rather large counties.

Another aspect of the redistribution debate I haven't heard yet: If somehow large numbers of the suburbites relocate into the metro area where are all you folks living there now going to live? They won't be able to afford it in Houston. You can get a nice 3 story 1100 sq ft 2 BR place in town for what a 5000 sq ft 5 BR home with a pool cost in the burbs. If a bunch of the suburbites sold the mini- McMansion and moved d/t I would hate to see how high real estate prices might jump. I work in such a metro maze and the traffic here at after business hours is much worse than the highway traffic I hit on the way home. Even our metro folks love their cars. But gain, Houston public transit leaves much to be desired IMHO.

Another situation that may or may not be unique to Houston: redistribution of the poor. The d/t areas had been the location of a large portion of our poorest citizens. But with the metro redevelopment they've been relocated to a low income ring surrounding the metro area which is then encircled by the affluent suburbs. By extrapolation to an extreme the poorest would eventually inherit the burbs. and the most affluent the inner city.

As the idea runs, you can't live out there in McMansion land, so you won't be able to sell the 5,000 SqFt house. You'll have to sell it to the Government that is making you move into the city. You'll get an underwater payment out of that, and it will have to pay for an apartment in the city.

Turning the 'burbs back into the cities is not going to be an easy as it looks issue. The government will have to address payments for the lands and homes in the 'burbs that are being left, places to live in the cities, costs of adding all these people and businesses that were out there to in here.

It is not something that looks like it will be Cost effective if you have to pay for the 'burbs land ownership issues, at least in a short term.

Older existing town areas tend to have inadequate power, water, gas, sewer, and comm infrastructure for a massive influx as well, if they haven't been updated. With less space for rights-of-way and plenty of existing networks in the easements, the rebuild cost for an existing area is much higher than new-build cost, at least for common utilities.

It may still end up being "lower energy" to have "cities", but given that residential new-build and re-build would be required in the cities, it seems like re-purposing some existing suburban zoning to better support localized business would help as well.

The other question about lower-energy cities is "What will the people do?". If they're hopping a train to a factory, wouldn't factory towns with workers living a few streets over also make sense?

IMHO, the key will always be jobs -- people and jobs must increasingly co-locate (work-at-home would be best!).

Older existing town areas tend to have inadequate power, water, gas, sewer, and comm infrastructure for a massive influx as well, if they haven't been updated. With less space for rights-of-way and plenty of existing networks in the easements, the rebuild cost for an existing area is much higher than new-build cost, at least for common utilities.

Well, not really. The existing infrastructure should already be fully amortized. New infrastructure doesn't really require more space than old infrastructure, especially using modern technology. And there are techniques such as bursting for sewer pipes that keep costs down (you run a machine through the old sewer pipe, it bursts it out to the required diameter, and pulls the new pipe into the resized hole.)

If infrastructure has been kept current (a big if in a lot of places), upgrading it is not that hard. Mostly, this is conditional on how upgrades are financed. The original infrastructure should have lasted at least 50 years, the local government should have been setting aside money to do the upgrades, and when the time comes to do the upgrades, the money should come out of the budget pool designated for that. Since the new infrastructure should also last a good 50 years, it's cost effective.

The thing about new subdivisions is that developers don't pay for a lot of the infrastructure and they don't set aside money for maintenance. They just build it, hand it over to the local government, and wait for the local government to add the infrastructure that the developer didn't pay for like connecting roads and schools. The local government gets stuck with all the costs from that point forward, while the developer goes on to build a new suburb.

An interesting aside (I read this in a book about urban planning) is that the local government is under no real legal obligation to take over the maintenance of subdivision infrastructure. You can't just give something to a government without its permission - it can always refuse to accept it. The local government could just say, "Thanks, but no thanks. We're not accepting the liability. The homeowners can maintain the roads and utilities themselves using their own money."

Of course, the homeowners would be completely screwed if that happened, so it seldom does, but in the current fiscal climate, perhaps local governments should think about the "Just say No" option with respect to subdivision infrastructure.

It's really a game that developers pay with governments - they build subdivisions, collect the up-front money from buyers, hand all the liabilities over to the government, and continue on to the next subdivision.

You can get a nice 3 story 1100 sq ft 2 BR place in town for what a 5000 sq ft 5 BR home with a pool cost in the burbs.

The thing is, Americans have been buying these 5000 sq ft 5 BR homes with pools on huge lots, when all they can afford is a nice little 3 story 1100 ft2 place on a narrow lot - in the suburbs. The difference has been paid for with creative financing - mortgages they can't afford. They can't really afford the big house, the big lot, nor the big SUV to get to work. And in future they certainly won't be able to afford the fuel to keep the big SUV running.

Ideally, what you want in the post-peak-oil era is a modest 2-3 story house on a small lot within walking distance of shops and light rail transit. That way you don't have to drive anywhere. That picture of the cozy little model town is probably what it should look like (just add a low-platform LRT station)

That's not what is available. Ultimately, a lot of these vast, sprawling suburbs are going to look more like Detroit. A few surviving houses in a desolate wasteland of vacant lots, with a few people growing their own crops far out of reach of transit, convenient shopping, and jobs.

That may be the most unique thing about Houston Rocky. Except for high priced d/t housing the development in Houston has been relocation to the burbs ALONG with employment. Many of the burbs surrounding Houston are essentially self contain metro-like areas. The best known is the Woodlands (developed with gov't money by George Mitchel...Mitchel Oil Company) About 30 miles from d/t. Not sure of the population but probably 150-200,000 in the general area. You can literally be born, live, get a degree from the community college, work, go to the theater, shop the malls till your heart's content, give birth to your children, be hospitalized, die a peaceful death in a nursing home, be buried, etc, etc and never have left the Woodlands. There are some folks in the Woodlands that do work in the metro area but they have their own commuter buses that travel their own seperate lanes to d/t. The other suburban areas are not that complete but not too far from it. Consider my position: I live 30 miles from d/t but for many years I worked offshore/overseas. Longer commutes of course. So I didn't count in that respect. But even now it takes only about 40 minutes to work d/t at rush hour: I live in a funky refinery town that the Mcmansion lovers have spurned. Great for me: I bought a 2300 sq ft townhome for the price of a 800 sq ft cheap condo in Houston. Plus I live across the highway from the largest refinery in the North America so when Mad Max time comes I won't have to worry about filling up the car. The city (Baytown) already has contingency plans to close off the highway to keep the zombies out when the time comes.

Maybe the more practical solution would be to establish more of a Woodlands like model in other areas. IOW turn those suburbs into metro areas in a sense. Land availability might be a big issue in some areas though.

Urban environments are extremely energy intensive as well, do you take into account the energy required for transportation of food, transportation of people, power for industry, etc?

I don't think that holds water. Supposedly New York city is our greenest city. The result of people sharing large buildings, and few have automobiles, as they are hugely expensive/impractical. Per capita, I would bet energy use is inversely proportional to population density.

Food transportation requires very little energy relative to commuting or household electricity. Assuming a person eats 1000 lb/year, this can be carried 100 miles by a gallon of diesel by truck or 850 miles by rail. Equal to a couple days driving, or less.

You are assuming all suburbanites commuting to work in the cities. Not so, I'm in suburb but live within cycling distance of my office.

What we should concentrate on is not expanding suburbia - moving current suburbanites to cities will be more CO2 intensive than having them live in the suburb but making them more energy efficient. In general we should incentivise people to live closer to their place of work (if peak oil doesn't take care of that).

As a urban green who spends time telling those in suburbia they should live more sustainable lives...

I assume that you deliver the same message to those who live in the suburban-like portions of the city surrounding the urban core. In some parts of the country, most of the "city" population lives in settings that are indistinguishable from the surrounding suburbs. I use Denver as the example I'm most familiar with: it is literally impossible to tell where Denver ends and the inner-ring suburbs begin without a map. I feel quite sure that a majority of the Denver population lives in single-family homes not within walking distance of work or shopping.

Still, the macro perspective is that 75% of the US population does not live in an urban environment (50% in suburbs, 25% rural, roughly). Rural high-density is probably an oxymoron, and it will take decades to shift the suburban population. I remain unconvinced that it is impossible to transition to a more-efficient electrified version of today's suburbs in some regions of the US. OTOH, such a scenario would probably require that those regions keep their renewable energy resources to themselves, which may lead to some "interesting" situations...

If I could I would train everyone that wanted to have the 5 acre plot in the 'burbs on how to make those 5 acres produce all their needed food, before they got to go live out there.

They don't have to do what they have been trained to do, they can grow a lawn of green short grass. But they would have the knowledge base and thinking implanted of what they could be doing instead of golf course greens. Golf Course Greens, where we grow your spinach, chard, mustard and collards, all while you play golf....

I guess my reaction is that this is that it would be a lot harder than most people think.

The first thing they do in the suburbs when they build a new subdivision is to strip away all of the topsoil and sell it. The land you get when the builders are done is really crappy - they throw some sod on it to make it look pretty for settlement, and then you discover that even grass doesn't grow very well (weeds seem to do OK, however). You can of course pay someone to deliver a load of topsoil - in effect buying back what really should have been there all along. Or you can work with the soil yourself and try and build it up again yourself. But you can't just start planting stuff, and expect it to do well..

The other challenge is that most people with 5 acres in the suburbs have too much debt to worry about raising their own food. If you owned the 5 acres free and clear, they would be all set.

...e.g. why should I, as a taxpayer, support the infrastructure needed for folks to live in a far-flung ex-urb...

Please don't forget that the folks in the far-flung exurbs, and the folks in the outer suburbs, and the folks in the inner suburbs, and many folks even in the cities themselves, are asking themselves a parallel question: why should I fork over big bucks to build transit lines usable only by a very select few, and then fork over more big bucks to subsidize lavishly the day-to-day operation of said transit lines by massively overpaid (and perpetually tardy and lazy) personnel, when I could be supporting something I can actually use, such as, oh, say, the road network, or a suburban school district that actually semi-works?

Don't know if any TODers have read Steven Johnson's 2008 book THE INVENTION OF AIR (about Joseph Priestley's scientific and philosophical endeavors as well as his connections with "the birth of America"). Of particular interest for TODers may be Johnson's discussion in Chapter Three ("Intermezzo: An Island of Coal") of the connections between human history and "intensifying energy flows." He argues that "a recurring theme of human history" is that "major advances in civilization are almost invariably triggered by dramatic increases in the flow of energy through society."

While there is nothing particularly novel about such an argument, Johnson's use of it as a "way around the classic opposition between Great Men and Collectivist visions of history" is useful in the present political climate. It not only focuses on the role coal played in the industrialization of England, it points (as does Heinberg's discussion in THE PARTY'S OVER)to the enormously significant changes brought about only relatively recently by the fossil fuel revolution.

While the fact of that revolution is hardly news to TODers, its unique significance in human history is not really appreciated by those who see no end to plentiful and cheap fossil fuels. Johnson's book will, unfortunately, not correct that lack of appreciation, but it is an interesting discussion of, among other things, how "changes in energy flows affect the creation of new ideas."

Of course, what we need now is a major advance in civilization in response to the two-headed devil unleashed by the rapid degradation of the fossil fuel endowment.

While the nature and arrangement of production, distribution and consumption of goods and services are necessarily at the centre of this response, how democratization proceeds hereafter is also critically important.

It's really quite disturbing. Senate/politicians Obama etc are barely dipping their toes into vastly watered down climate bills and energy efficiency and alread the country is in full scale revolt. Can anyone imagine if any meaningful action was to be proposed. If this latest heel dragging is anything to go by America is really screwed.

I'm not professing to be a pariah of efficiency here in Europe, but (without the problem of legless hobbled lame duck stale-mated vetoed leaders that America seems to have) we seem to have more ability do pass legislation here.

WASHINGTON - The Supreme Court has ruled that corporations may spend freely to support or oppose candidates for president and Congress, easing decades-old limits on their participation in federal campaigns.

But then the Supreme Court is only defending the Constitution, which, after all, was intended to entrench the pursuit of happiness for property owners.

Corporatization has submerged Jefferson's dream of a democracy sustained by the political commitment and weight of small property owners.

As with the redefinition of Negroes and women so as to declare them people instead of property, I think the only hope for democracy to ever again rear its hopeful head in Amerika is through another redefinition of what constitutes 'property', firstly at a conceptual level, and secondly at a practical level.

We often discuss localization here. My concern now is that the big cheeses in small communities will have even more control (of zoning, building codes, etc.). Also, will the next step in this fiasco be that Churches will insist that they have the same freedom of speech rights as corporations, creating a constitutional crisis? Much of the consensus is that this will open a huge can of worms, leading to full rights of corporations as individuals and religious institutions as well. The concept of government, bought and paid for, is nearly complete. The right to direct financial support of candidates will soon follow.

The TARP bailout was a hint of what is coming. Soon all our taxes will go straight into the coffers of the richest individuals and corporations in the world. Not paying said taxes will make you an outlaw. But mostly it will be arranged as it already is that you just can't choose not to pay them.

The County Board recently passed a tax on local purchases to fund a stadium for a team of multi-millionaires owned by a multi-billionaire. This was the only new tax in the state approved by the (Repug) governor.

This will be the model for the future. The only new taxes will be--not for children, libraries, hospitals...--no, only to fund the activities of the people who need more money the very least in society. In one sense, this is the purest form of capitalism--those with the most capital have total power, which is mostly used to get more capital/power. How this cycle will/can be broken is anyone's guess.

No - we need to differentiate between people and corporations. Afterall corporations don't get to vote ... so we shouldn't allow them backdoor entry by either buying political ads or buying representatives.

Indeed. I complained at the time that the problem with Bush's nominees for the Supreme Court wasn't their positions on abortion or second amendment gun rights, but that all of them were strong supporters of the rights of giant corporations to do what they damned well pleased.

Unfortunately, you're probably right... We should get a pool going on what part of the U.S. turns in to Mogadishu first. I've got $100 of Federal Reserve Funny Money on Southern California by 2025. Very hot area, very car dependent, mostly service economy related.

Summary
Working gas in storage was 2,607 Bcf as of Friday, January 15, 2010, according to EIA estimates. This represents a net decline of 245 Bcf from the previous week. Stocks were 22 Bcf higher than last year at this time and 6 Bcf below the 5-year average of 2,613 Bcf. In the East Region, stocks were 56 Bcf below the 5-year average following net withdrawals of 131 Bcf. Stocks in the Producing Region were 5 Bcf below the 5-year average of 815 Bcf after a net withdrawal of 96 Bcf. Stocks in the West Region were 55 Bcf above the 5-year average after a net drawdown of 18 Bcf. At 2,607 Bcf, total working gas is within the 5-year historical range.

Next winter might be interesting. Because of high decline rates in shale gas plays and because of the slow down in drilling, Matt Simmons last year predicted a NG supply/demand imbalance problem as soon as the winter of 2010-2011.

Oil output at Russia's Exxon Mobil-led Sakhalin-1 project fell more than 14 percent last year due to natural depletion, an Exxon Mobil (XOM.N) spokesman said on Wednesday.

He said crude extraction at Sakhalin-1, which is run under a production sharing deal, dropped last year to about 8.2 million tonnes from more than 9.6 million tonnes in 2008.

The project has been producing oil for several years and reached peak production of 11.2 million tonnes in 2007.

That is a drop of 14.3 percent 2007 to 2008 and 14.6 2008 to 2009. That is one hell of a natural decline rate. Of course the wells of Sakhalin-1 contain the latest and greatest Horizontal MRC technology. Could this swift decline rate be a result of these superstraws?

The article states that the project had been producing oil for several years! Well, I did a little googling and found out just how many years. Russia — Sakhalin-1

After 10 years in development, first production flowed from the Chayvo field in early October 2005. Following the completion of the Onshore Processing Facility in late 2006, production reached 250,000 barrels of oil a day in February 2007.

And they peaked in 2007, one and one half years after the first production came on line.

Those are odd numbers Ron. While a horizontal well might deplete a reservoir faster I would still expect a few years of little or no decline. But then I'm not encumbered by excessive knowledge of the play. Just a WAG but I suspect it has more to do with depletion of the reservoir energy then the reserves itself. If these are pressure depletion drives (as opposed to water drive) then you might expect an early and rapid decline rate do the the high withdrawal capability of a hz well. But that would also imply a relatively small reservoir. I tied to dig up details but found mostly corporate cheer leading.

Nothing odd - just a typical modern offshore development. It's expensive to explore here, and even more expensive to build the production facilities. As soon as everything is commissioned, you start up your horizontal wells, with water injection and/or gas lift following almost immediately. The facilities have been planned to get maximum production up-front: there's a huge CAPEX bill to pay, after all...

Makes you really really wonder about Ghawar and other older on land fields that have been re-drilled with horizontals.

Given these are generally water drive fields one has to imagine that you get a fairly spectacular hit from water at some point as the well declines. They have to be fighting water channeling a few years after the well is put in.

This basically fits my general feelings about horizontal wells they are great for a period from a few months to a few years then its technical problem after technical problem for the remaining lifetime of the well at any point in time the decision could be to shut the well in.

I'd not be surprised if these wells actually leave more oil in the ground than going with horizontals and moving to stripper wells over time. As the horizontal wells age it seems maintenance becomes a huge issue and its literally well by well decisions so aggregate data is difficult to collect.

However my hunch if you will is that the real URR is actually lower once you average.

U.S. crude oil refinery inputs averaged 13.8 million barrels per day during the
week ending January 15, 181 thousand barrels per day below the previous week's
average. Refineries operated at 78.4 percent of their operable capacity last
week. Gasoline production increased last week, averaging 8.6 million barrels
per day. Distillate fuel production decreased last week, averaging 3.5 million
barrels per day.

U.S. crude oil imports averaged 8.5 million barrels per day last week, down 355
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 8.5 million barrels per day, 1.2 million
barrels per day below the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 730 thousand barrels per day. Distillate fuel imports
averaged 272 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) decreased by 0.4 million barrels from the previous week. At
330.6 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
increased by 3.9 million barrels last week, and are above the upper limit of
the average range. Both finished gasoline inventories and blending components
inventories increased last week. Distillate fuel inventories decreased by 3.3
million barrels, and are above the upper boundary of the average range for
this time of year. Propane/propylene inventories decreased by 4.8 million
barrels last week and are below the lower limit of the average range. Total
commercial petroleum inventories decreased by 1.6 million barrels last week,
and are above the upper limit of the average range for this time of year.

"I do believe however that the new community forces in the Exo Burbs is the Mega Church"

So why should fundamentalism be linked to problems with language? One answer is simply that people who have poor verbal skills are attracted to religious fundamentalists - perhaps because it provides a peer group of similarly impaired individuals.

Now that the US Supreme Court has ruled today that Corporations can spend unlimited money on campaign adds (5-4), defacto buying of elections in the US, expect more BAU. Not that things would have changed much

What I've been reading, watching, and listening to
Important Books About Energy by Vaclav Smil

In the last few months I have read three books by Vaclav Smil that I highly recommend. He also recently visited our offices and opened my eyes to new ways to think about solving our energy and environmental issues.

If you are interested in learning more about the foundation of our energy system, the issues we face, and opportunities to address them, I highly recommend his books, even though some are slightly technical.

Bill Gates makes an excellent point. I have long been a fan of Vaclav Smil and can highly recommend his works.

Given the size of Iraq's undeveloped giants there are no technical reasons why within 10 years the country can't supplant both Iran and Russia to become the world's No. 2 oil producer after Saudi Arabia. No wonder Iraq holds three of the top 10 fields of the future.

Earlier today, we started a lighting retrofit of a large commercial warehouse that operates 24x7. This facility is currently illuminated by two-hundred and forty-eight 400-watt HID fixtures, two-hundred and sixteen of which are equipped with high-low occupancy sensors. There are an additional twenty-one 250-watt HIDs in the loading bays. The fixtures equipped with motion sensors operate at low power roughly 70 per cent of the time.

This picture shows an isle with the HIDs at full brightness:

We will be replacing these 400-watt HIDs with an equal number of 3-lamp T5 HO fixtures and, likewise, the 250-watt low-bays with an equal number of 4-lamp T8s. With that, their lighting load falls from 120.2 kW to 39.3 and their lighting usage from an estimated 808,979 kWh/year to 199,760 (with occupancy sensors). This will reduce their annual CO2 emissions by 490 tonnes.

The simple payback for this project is 1.25 years, the IRR is 85.7% and the ten-year NPV at a 5% cash discount is $615,660.00.

I've worked in some high security settings back in my IT days but let me tell you these guys ain't no slouches when it comes to protecting the goods. And given security likes to play "Where's Waldo" anytime you step foot in the place, there will be no 73 year old Glenfiddich hiding in any of my body cavities.

SERIOUS cold, Justen Ladda said, is when the sponge in the kitchen sink feels like wood or the toothpaste freezes or the refrigerator turns itself off, as it did one particularly frigid day last winter. Not that Mr. Ladda, a 56-year-old sculptor who has lived heat-free in his Lower East Side loft for three decades, is bothered by such extremes. “Winter comes and goes,” he’ll tell you blithely, adjusting his black wool scarf and watch cap. (Along with fingerless gloves, long underwear and felt slippers, they are part of Mr. Ladda’s at-home uniform when the mercury dips.)

Congratulations, Paleo; your new windows will make a world of difference in your personal comfort and, hopefully, your gas bill too. If you have (or can borrow) one of those temperature guns, it would be interesting to compare the surface temperature of your current windows and their replacements.

According to the source noted below, at -18°C/0°F, the inside mean radiant temperature of single pane glass is roughly -8°C/17°F, whereas your new windows will likely be in the range of +18°C/64°F. (Your new windows could very well be as warm or warmer than your walls!)

I have a $100 thermal gun, but glass temperatures don't come out well (it even says so in the manual). I think glass only partially absorbs/emits IR, some of the rest is either reflected or transmitted. So you get a combination of the glass temperature, and the inside temp , and of the ouside temp. I also measured a (liquid) puddle at 20F! So I think certain surfaces don't work too well with it.

Try Harbor Freight. Their automotive remote temp sensor often is on sale for $10, reg $20. I use it for wall temps, windows, and water temps in the fish house and ponds, just point and shoot. Not sure about glass, but water temps very accurate.

no comments about air travel down? well! that is reduction of lifestyle. and i read lots of comments alluding to----DIE OFF!
did i mention die off? yes i did. die off.

funny, i live on the same street for 26 years and the town repaved it in the summer of '09. it was paved from dirt 20 years ago. so it took 20 years to get a repave. why? dont know. misallocation of resources? perhaps. i know my property taxes are fully 1/3 of my factory take home pay. the preliminary budget for 2010 is 70 million dollars for a town of 10,000 homes.

i cant afford to repave the driveway or replace my windows. but i have a brand new street in front of the house. the new pavement added nothing to the resale value of my house. i would love to bail out of the great state of nj. but where would i go? kentucky? arizona? florida?

maybe i can get a job as a janitor on one of those space ships going to titan, a moon of saturn. titan is covered in hydrocarbons. IT HAS LAKES OF METHANE!!!!! think ava tar instead of tar sands, get it? hah-hah!

“Peak Oil” theory, which predicts that global oil production will reach a maximum rate and then inexorably decline. Everyone can grasp the seductively simple hypothesis, which encapsulates deep-rooted insecurities over energy supply. Surely everyone must understand that oil is a geologically scarce resource that must one day run out.

The author of that article goes on to explain how peak oil will remain just a theory due to the huge amounts of natural gas that will be extracted from shale deposits.

So when the Author of an article thinks he or she has a good counter argument against peak oil, the explanation of what peak oil means is correct, simple and easy to understand. But when an Author is aruing against peak oil without any real basis, they come up with all sorts of strange, untrue interpretations for what peak oil means.

I have a theory that the number of articles downplaying or refuting Peak Oil will be directly proportional to the rate of net decline post-peak - at least for a while. The farther we get past peak, the more articles like this will come out. This dynamic will end, and you'll know we've passed a cultural tipping point, when the "Why didn't anyone tell us about Peak Oil?" articles start coming out.

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“I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.”

—Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931